Cablevision: Aereo Is Illegal, But Broadcasters Are Wrong in Their Attack on Startup

Cablevision Systems, aiming to protect the legality of its network DVR, released a white paper stating that while TV-streaming service Aereo is violating the law the arguments broadcasters have made in attacking the startup threaten to “cripple” cloud-based services.

ABC, CBS, Fox, NBC and other broadcasters have appealed to the U.S. Supreme Court seeking a reversal of lower-court decisions denying their request to shut down Aereo for copyright infringement. Aereo, whose backers include Barry Diller’s IAC, has based its fair-use defense on a 2008 ruling that found Cablevision’s remote-storage DVR (RS-DVR) service did not violate copyright laws.

In its white paper, Cablevision said it agreed with broadcasters that the Aereo service violates copyright laws because it retransmits broadcast TV without a license. However, the New York-area cable operator said it “strongly rejects anti-Aereo arguments made by these broadcasters” because, Cablevision argued, that threatens to overturn the decision confirming the legality of RS-DVR.

Cablevision said in a statement: “The broadcasters’ overreaching copyright arguments would, if accepted, cause grave harm to consumers, cloud-based technology and future innovation. In a case about Aereo, the broadcasters go well beyond Aereo and attack the legal underpinning of all cloud-based services, everything from the Apple iCloud to Cablevision’s own remote-storage DVR service.”

The cable operator continued, “In short, the broadcasters are asking the Court to throw the baby out with the bathwater — a move that could cripple cloud-based innovation in the U.S.”

“Without getting into the legal merits of the Aereo service itself, we fully support Cablevision’s position regarding remote DVR and agree that allowing the broadcasters to use the Aereo case to overturn the remote DVR case would be inappropriate and unnecessary. The remote DVR precedent established in the 2nd Circuit should stand,” the operator said. Charter CEO Tom Rutledge was formerly Cablevision’s chief operating officer.

Aereo declined to comment on the Cablevision statement. The startup is expected to file a brief with the Supreme Court later Thursday.

At an investment conference in September, Aereo CEO Chet Kanojia said the prospect of overturning the Cablevision RS-DVR precedent has implications for other companies, such as the Google Drive file-storage service. “To stop Aereo, you’d be stopping entire industries,” he said.

Cablevision has not filed an amicus brief with the Supreme Court in the Aereo case. Its white paper on the issue is available here.

If a cable company has to pay to retransmit local TV on their system, then so does Aereo because they do charge for it’s use. That’s just like Spotify, except Spotify will pay about 5 cents for every 1000 plays.